Bob Olstein Is Heavily Bullish On GM And DDS by Ritesh Anan, Benzinga
Renowned value investor, chairman and CIO of Olstein Capital Management, Robert “Bob” Olstein, will feature on this Sunday’s edition of Wall Street Week.
In this excerpt from that interview, Bob Olstein talks about the two stocks that he is currently bullish on – General Motors and Dillard’s – explains the reasons for his bullishness.
ValueWalk's Raul Panganiban interviews William Burckart, The Investment Integration Project’s President and COO, and discuss his recent book that he co-authored, “21st Century Investing: Redirecting Financial Strategies to Drive System Change”. Q1 2021 hedge fund letters, conferences and more The following is a computer generated transcript and may contain some errors.
“Well, we are buying companies like General Motors, okay?” Bob Olstein said. “We know the cars are down in China; we understand they are going to have a bad quarter. The company’s balance sheet is shaped up after their bankruptcy. They have earnings power, free cash flow in excess to $3 a share. In essence, I am paying $30.”
Olstein was asked if the reason he is bullish on General Motors is that vehicle sales in America are at a high and continuing to grow. He replied, “Who cares? This company has $3 a share. I can clip my coupon every year. I remember sitting here and we were talking about Cisco and Microsoft back in 2000, and they continued to march on. And they tripled their revenues and you lost half of your money in Cisco.
“And if you bought John Deere, which is similar to General Motors, it also tripled its revenues, but you made a four bagger, you know why? Because it wasn’t priced right. GM is not priced right.”
On why he is bullish on Dillard’s, Bob Olstein said, “Here is a company that has free cash flow of 10 percent yield. It has excess depreciation; there’s non-cash depreciation over its capex. They have got real estate underneath it. We think this stock is worth as much as $140 a share, and it’s selling at a $100 a share.”